Thursday, November 12, 2009

Cynic's Economic Dictionary

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src="http://pagead2.googlesyndication.com/pagead/show_ads.js">Though there are plenty of words, phrases and definitions to add, the world of finance needs a "working man's" dictionary of commonly used terms. I thought I would get started on this project. Without further ado, here are the entries I feel need translation from the world of high finance and government double speak into real-world terms:

federal reserve: a private, non-federal, unconstitutional, for-profit corporation whose interests are aligned with whomever can make them money and have nothing to do with the interests of the United States (unless the private sector stops borrowing money).

economic stimulus: a fascist policy of spending/stealing other people's money or counterfeiting money for the benefit of the elite or another small segment of the population with a powerful corporate lobbying group.

quantitative easing: counterfeiting money.

inflation: what happens when you counterfeit too much money. A stealth tax on every one (i.e. you) who is not sitting close to the counterfeiting machine.

deflation: the normal, healthy state of the economy when sound money is used (see "money" definition below). Bankers fear deflation because they make less money, so bankers destroy any savings you may have (see "inflation" definition above) to counteract deflation and ensure that they make an adequate profit.

money: Gold and silver (at least according to the U.S. Constitution, which is no longer relevant and should be ignored).

good: bad

bad: good

buy and hold: a mantra of paperbugs, a surprisingly mainstream cult of fanatics that only invest in general stocks or stock indices like the Dow Jones Industrial Average. This cult provides an efficient way for people to lose most of their life savings when a secular paper bear market is in effect (like the one that started in 2000, which is far from over).

mark-to-model accounting: fraud.

strong Dollar policy: an attempt by government to destroy the value of our savings and our paper currency.

democrat: corporate whore that favors welfare over warfare (but reserves the right to engage in both).

republican: corporate whore that favors warfare over welfare (but reserves the right to engage in both).

price to earnings ratio: only useful when it supports the bullish CNBC case (see "buy and hold" above), otherwise is an out of date, useless metric and should be ignored. When the PE ratio is too high, a "smoothed" or "operating earnings" PE ratio is used to keep the sheeple calm (PE is currently in the range of 85 for the S&P 500, near its all-time highs, so it is obviously of no use to serious investors).

Dow to Gold ratio: a method of getting ahead financially that must be marginalized at all costs lest the sheeple catch on.

I mean no offense to those who identify or are affiliated with any of the terms listed above. The federal government now helps to control and/or owns financial firms, insurance companies, auto companies, car sales, the real estate and mortgage market, health care, farming, energy, education, wages, travel, media and other aspects of our lives but most still like to pretend that we live in a free market economy (everything's relative I guess, eh?). Economy is a crack-pot science because the only economics taught in formal educational institutions is that which supports the goals of the state, comrade.

Enjoy the permanently fresh, imported, processed, genetically-modified popcorn while our economy buckles (even further) under the impossible burden of an incompetent, bloated, out-of-control corporatist bureaucracy. Fortunately, a new economic cycle of growth and prosperity should be less than 20 years away. In the mean time, burying some metal in the backyard is a great investment and doesn't require an E-Trade account. Sorry for the cynicism, but I need to vent after a long day. Ahhhhh, I feel much better now!